Economic Trends

February 2012

I recently had the pleasure of addressing a group of in-transition executives. The presentation title was Marketplace Trends. The presentation covered a multitude of areas (I mentioned in the last post - I am a data junkie). There was a strong economic focus - and that is the focus for this post.
The retained/executive search industry (and my firm as a micro-representative of the greater industry) is considered a leading economic indicator. We can usually sense, by level and type of activity, what is happening in the economy. In preparing for last week's presentation, I was able to pull from multiple data sources and the trend line is positive (not without its lumps, but overall - it is in a positive direction). Here are some of the data 'pieces':

Manpower came out with its annual information regarding worker satisfaction. In 2010, it was reported that employee satisfaction had hit a new low. That number was 'surpassed' with another new low for 2011. And the 2012 numbers were not looking good. The majority of employees said that their job is unrewarding and saps their energy. That predicts movement - current employees are more likely to take a call from a search firm. They are tired - and open to seeing what a new employer might offer.

Bersin & Associates (an HR consulting company) reported last year that talent shortages have been cited as a key business challenge by more than 50% of business leaders. They went on to say that cost reductions are no longer the first thought. Leaders are focused on innovation, skill development and rebuilding the business.

Conference Board and Thomson Reuters/University of Michigan Surveys

Both of these organizations are known for their monthly surveys - reporting on varying economic indicators and consumer feelings. Taken in total, the direction is generally positive (I think the words "lumpy, but up" best describe the direction of our economy).

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.4% in January. According to the economists at the Conference Board, this fourth consecutive gain in the LEI points to somewhat positive economic conditions in early 2012.

The Conference Board Consumer Confidence Index® (CCI), which had increased in December, retreated in January.

During the January 2012 reporting period, the Thomson Reuters/University of Michigan index of consumer sentiment rose more than forecast to its highest level in almost a year.

The Conference Board Employment Trend Index® (ETI) increased 0.73% in January. It is up 5.9% from the same month one year ago.

Anecdotal Information

The tone of the calls we receive have changed as well. Taken in total, the conversations are much more strategic/long-term in orientation. Companies are thinking in terms of upgrading talent when an opening presents itself. In addition, the companies are more frequently using the terms succession planning and retirement planning. These are not terms we have heard since 2007/08.

Hard or soft science?

It's hard to tell. The trend lines seem to be going slowly upward. We will continue to look at/report on the indicators. We will also slowly start looking into what other people consider to be leading economic indicators - corrugated box production, shipping containers arriving in U.S. ports and airline business seats sold. While not traditionally the items looked at by the Conference Board, they do tell an interesting story. Stay tuned!